From Peter Martin (who’s Treasury sources are excellent) today:
The budget update to be unveiled next week will forecast a deficit of about $40 billion and a peak in debt of more than $400 billion.
The figures are well above the forecasts of $30 billion and $370 billion in the Treasury’s pre-election budget update released four months ago.
Most of the deterioration has been driven by the government, and the Senate, rather than changed economic circumstances.
The story goes on to say that the main driver of the blowout is Government decisions:
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- $8.8 billion for the RBA;
- $2.1 billion for the aged rentiers via super concessions;
- $270 million for retention of education expenses;
- unknown costs as a result of the government’s decision to delay $5.2 billion of public service cuts and the decision of the Senate to delay a vote on the mining tax repeal bill;
- $2.3 following Labor’s hypocritical decision to block spending cuts for higher education that it had previously proposed.
